7 Answers
7

There are many acceptable ways to structure your site for both SEO and internationalization. Each have advantages and disadvantages.

Top Level Domains

Buy the same domain name at multiple top level country domains like example.com, example.es and example.de.

Advantages

Fully supported by Google. You can add the sites to Google Webmaster Tools where there are options to tell Google about how they are targeted.

Often preferred by users who tend to like content published on the TLD for their country

The domain name itself can be localized. Many international users may react badly to English words or an English sounding domain name. This can be especially important for languages that do not use a Latin alphabet.

Supports localization by country. You can have separate sites like example.co.uk and example.com.au targeted at audiences in different countries. The sites may have duplicate content with slight spelling differences and still rank well. In fact, multiple well localized sites in the same language may rank better than a single site in that language.

Hosting can be localized by pointing DNS to a web server in the country being targeted.

Disadvantages

Expensive and time consuming to buy many domains. Especially if you have to deal with squatters.

Cookies cannot be shared across multiple locales, meaning that users have to log in separately to each site.

No good option for localizing only by language since many languages have multiple countries and no country TLD may be the language code. Even in cases where the TLD does match the language code like es, search engines may assume that the site is only appropriate for users from Spain, not for all Spanish speakers.

Sub-domains

Buy a single domain, and use sub-domains such as en.example.com, and es.example.com

Advantages

Fully supported by Google.

Supports localization by country or by language.

Hosting can be localized by pointing DNS to a web server located close to users.

Easy and cheap to implement compared to buying multiple domains.

Cookies can be shared across all locales, enabling single sign on for a more seamless user experience.

Disadvantages

No opportunity to localize the domain name itself

May look less local to users compared to a top level domain.

Sub-directories

Buy a single domain, and use sub-directories such as example.com/en/, and example.com/es/

Advantages and Disadvantages

The same as sub-domains, except that there is one DNS entry which precludes hosting your site in multiple countries for different locales.

Techniques that are NOT recommended

File Names: Using different file names such as index_en.html and index_de.html. This technique is not fully supported by Google. For example, there is no way to set targeting in webmaster tools.

URL Parameters: Using URL parameters such as lang=en. It is not recommended for the same reason that different file names are not recommended.

Accept Language Header: Automatically switching the language based on the Accept-Language header.

Many users do not have this header set correctly. This is especially true for users traveling abroad that may be using a friend's computer, or an internet cafe. It is also often true for international users that install an English web browser and know enough English to be get around, but would prefer content in a different language.

You may use the Accept-Language header to suggest that users might prefer a different version of the site by displaying a message when the site they are visiting does not match the Accept-Language header.

Geographic IP Addresses: Automatically switching the language based where the IP address is geographically located.

Tell Google About Your Site

You should add each language (or locale) of your site to Google Webmaster Tools. This can be done for top level domains, for sub- domains, or for sub-directories.

If your site is targeted by country, you should use webmaster tools to set the site targeting. Navigate to "Configuration" -> "Settings" -> "Geographic target" and choose to target the correct country from the drop down list.

"The same as sub-domains, except that there is one DNS entry which precludes hosting your site in multiple countries for different locales." -- note that it is not because you have a single domain that you cannot host your one website in many different countries. With all the technology we have, that "easy" to do. And if you use a system such as Cassandra, the data will follow no problem.
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Alexis WilkeNov 6 '13 at 22:49

"Especially if you have to deal with squatters" - What is a squatter?
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DaveFeb 14 '14 at 8:25

A domain name squatter buys variations on your domain names. In this case, you might own example.com, but the squatter has snatched up example.co.uk and example.it
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Stephen Ostermiller♦Feb 14 '14 at 11:12

In my opinion, you should use either the folder or subdomain approach, because they are more intuitive to the user. Which one is a matter of personal taste, I personally find the folder approach clearer. The filename option is far less intuitive.

Parsing the Accept-Language header for directing the user to the correct content on his first visit is a good idea, but you should only do it to redirect on the folder or subdomain url. Otherwise, it would be impossible to link to content in a specific language, and the indexing of your website will be a mess.

Also, always give the user the choice, no matter what their headers say -- I often switch back to English when being offered the German version, either because the translation is so awful, or because it's easier to read in English (MSDN, for example -- all the code is in English, so having the text in German means more context switching)
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balpha♦Jul 19 '10 at 14:00

+1 balpha -- this is similar to Jakob Nielsen's argument that mobile-friendly sites should always provide a link to the full-desktop version of a page. When multiple versions of a page exist, make an informed guess which one the user wants, but let the user make the final choice.
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BlazemongerApr 17 '13 at 13:01

As a German user I hate it when a website won't let me on the English page because it's think it knows better what I want. It might be hard for Americans to understand but there are actually people who speak more than one language.

Sometimes I might want to view the German websites and sometimes I might want to view the English one.

Simply parsing the Accept-Language header might drive me mad.

That especially true if your German page is a cheap translation of your English page.

To make it easy for your user the English version should also have localisation such as domain.com/en/ or en.domain.com.

When I type domain.com you get one guess to give me the English or the German page based on my Accept-Language header. If I however don't like your choice than I should be able to simply exchange the language in the domain name.

Extra hint: If you have the language in front of the domain name both typing ger.domain.com and de.domain.com should bring me to the German website.

Bing relies on geo-meta tags, but for Google you have to use Google Webmaster Tools.

If you want to target global markets use www.domain.com with a prefered user language (browser give laguage priorities on Accept-Language header) when you have it or with your key market language when you don't have it.

It also depends if your business is more of a global or local nature. We are a copyrighting agency, so for use its more local business. Therefore Top Level Domains are better than running everything on .com.